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Use a graph to illustrate how this new information affects the Bertrand equilibrium. What happens to the equilibrium prices of the two firms?
Use graphs to show how a competitive import industry could drive a monopoly out of business.
Explain the condition under which the monopoly chooses to cater to the snobs rather than to the hoi polloi.
Discuss how limiting the length of a copyright would affect the pricing used by the publisher of a novel.
Show that a monopoly will not necessarily lower its price by the same percentage as its constant marginal cost drops.
Show how the equilibrium, consumer surplus, and producer surplus change. What is the deadweight loss, if any, from this price control?
Under what conditions (in terms of profit per room, number of rooms, and so forth) would it pay for a hotel to install a jammer, assuming the law permits it?
What is Apple's price/marginal cost ratio? What is its Lerner Index? What elasticity of demand does Apple believe it faces?
Calculate the hospital's price/marginal cost ratio, its Lerner Index, and the demand elasticity, that it faces for saline solution.
Assuming Tenet is maximizing its profit, what is the elasticity of demand that Tenet believes it faces? What is its Lerner Index for drugs?
Given that the Segway's price is $5,000, calculate the firm's price/marginal cost ratio, its Lerner Index, and the elasticity of demand it believes it faces.
In 2002 seven pharmaceutical companies announced a plan to provide low-income elderly people with a card guaranteeing. Why did the firms institute this program?
What is Apple's price/marginal cost ratio? What is its Lerner Index? what elasticity of demand does it believe it faces for this tiny computer?
What would happen to the equilibrium price if the government had set a price ceiling of $200 per vial of Botox? What welfare effects would such a tax have?
Many colleges provide students from low-income families with scholarships, subsidized loans, and other programs. Explain why universities behave this way.
Alexx's monopoly currently sells its product at a single price. What conditions must be met so that he can profitably price discriminate?
What is the firm's Lerner Index? If Stamps is a profit-maximizing monopoly, what elasticity of demand does it face for a customized stamp?
Determine how much Allergan loses by being a single-price monopoly rather than a perfectly price-discriminating monopoly. Explain your answer.
Why did Ford require that Canadian dealers sign an agreement with Ford that prohibited moving vehicles to the United States?
Explain why shrinking profit margins are associated with the reduction or elimination of student discounts.
In 2000, Amazon, the large e-commerce vendor, apparently engaged in dynamic pricing. What type of price discrimination is this dynamic pricing?
Using information in previous problem, determine how equilibrium price and quantity of processing tomatoes change if price of tomato paste falls by 10%.
Discuss what is the elasticity of demand for broadband access capacity for firms? Is demand at the current price inelastic?
Keeler et al. (2004) estimate that, when U.S. Tobacco Settlement. What is elasticity of demand for cigarettes? Is overall cigarette demand elastic or inelastic?
According to Agcaoli-Sombilla (1991), the elasticity of demand. In which countries is the demand for rice inelastic? In which country is it the least elastic?